Pre-Marital Agreements

fama_isaloni_2012

Prior to the adoption of the Uniform Premarital Agreement Act (“UPAA”) in 1988, the common law in New Jersey required that the proponent of a Premarital Agreement establish:

(1) that there be full disclosure by each party as to his or her financial conditions;

(2) that the party sought to be bound by the agreement understood and accepted the terms and conditions of the agreement; and

(3) that the agreement be fair and not unconscionable, that is, that the agreement will not leave a spouse a public charge or close to it, or provide a standard of living far below that which was enjoyed both before and during the marriage.

Under the common law in New Jersey, a Premarital (or Antenuptial) Agreement is generally valid so long as a spouse had sufficient opportunity to reflect on his or her actions, was competent, informed and had access to legal advice, and that of any relevant experts.

The UPAA specifically applies only to agreements executed on and after November 3, 1988. Therefore, any agreement executed prior to November 3, 1988 is governed by the common law of New Jersey.

For Premarital Agreements executed on and after November 3, 1988, the burden of proof to set aside a Premarital Agreement falls upon the party alleging the agreement to be unenforceable. A Premarital Agreement shall not be enforceable if the party seeking to set aside the agreement proves, by clear and convincing evidence, that:

a. The party executed the agreement involuntarily; OR

b. The agreement was unconscionable at the time enforcement was sought; OR

c. That party, before execution of the agreement:

(1) Was not provided full and fair disclosure of the earnings, property and financial obligations of the other party; OR

(2) Did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; OR

(3) Did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party; OR

(4) Did not consult with independent legal counsel and did not voluntarily and expressly waive, in writing, the opportunity to consult with independent legal counsel.

The easiest device to ensure full disclosure would probably be a schedule annexed to the agreement setting out, at least in general terms and with approximate values, the assets of the parties, as well as their income over the past few years.

Although the applicable measure for post-divorce judicially fixed support is the standard of living during the marriage, there does not seem anything inherently ‘unfair’ in an antenuptial agreement which uses a different standard; perhaps the somewhat lower standard at which one spouse lived before the marriage.

However, an agreement which would leave a spouse a public charge or close to it, or which would provide a standard of living far below that which was enjoyed both before and during the marriage would probably not be enforced by any court.

Related to this discussion is the concept that unless there is an agreement to the contrary, a surviving spouse has the right to take one-third of the augmented estate of a deceased spouse. That specific right, however, may be waived, in whole or in part, by written agreement. Specifically, an elective share may be waived by a written contract, agreement or waiver, signed by the party waiving after fair disclosure.

==

To discuss your specific situation, please call me, Paul G. Kostro, Esq., to schedule an appointment: 908-232-6500 or Paul@Kostro.com

You may find the following Blog Posts helpful: Pre-Marital Agreements

%d bloggers like this: